Rise of MSMEs in Food Processing Sector

Food processing sector

MSMEs (Micro, Medium, and Small enterprises) in India have tremendous potential to grow and contribute to the Indian economy. Long-term partnerships with Indian MSMEs having good technical capabilities could not only provide a low-cost advantage but also a source of “frugal innovation” for companies worldwide. An ecosystem with MSMEs could be a source of global competitive advantage for the companies investing in India. The corridors for different sectors would further assist in the creation of the ecosystem for co-development and growth. In particular, the food processing sector has seen a lot of participation from domestic and global players. The reasons for such increased investment in the food processing sector are as follows:

    1. By 2020, the Indian food and retail market is projected to touch $800bn with processed food contributing to $500bn, and most of it is concentrated in Tier II and III cities. This has led to the development of food parks in these cities, due to which the plants get access to govt subsidies and are near raw materials.
    2. Huge opportunity for integrated cold chain setup, food quality control, and testing labs, dry warehousing, fruit pulp and concentrates, modernization of food and oilseed milling, food flavors, additives, and coloring, milk and poultry processing, etc, which has led to the entry of large foreign players who are helping Indian MSMEs with technology transfer and setting up captive units in India
    3. 4 mega food parks, 7 food testing labs, and 9 cold chain projects were approved in northeast India along with subsidies to the tune of 80% for setting up plants in these areas. This has led to reducing the burden on Tier I cities that are already grappling with infrastructure issues.
    4. Recurring grants in aid ranging from Rs.10 lakhs to 50 lakhs are provided for MSMEs looking to set up plants in food processing. This is in addition to various state govt schemes which are promoting specific food processing sectors.
    5. Agribusiness opportunity to cater to rural India is almost $330bn and rigorous training is being imparted by the food processing ministry for MSMEs in this sector. This has not only led to a rise in income in rural households but also promised more stable income flows, with farm labor returning back to the farms as agricultural income is more stable and available throughout the year.

Overall SolutionBuggy has seen a lot of projects related to innovative implementation and product stratification in the food sector posted by MSMEs from Tier II and III cities. So the requirement is clearly for knowledgeable food consultants with good experience in handling projects across domains and also its customization for the small and medium sectors. We have successfully completed more than 1,080+ projects in various domains and have helped MSMEs get verified food consultants and solve their problems.

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